When you consider filing for bankruptcy, there are some steps you might take to make the process smoother. You might discover that there are alternatives to bankruptcy. If this doesn’t work in your case, steps of preparation can help you go through the process as an informed individual.
1. Sort through your finances carefully. Make a list of all your bills and payments, so you know what you are dealing with financially.
2. Find out your credit score. Legally, you are entitled to one free credit report from TransUnion, Equifax and Experian annually. Go through your report carefully, and make notes regarding each creditor and how much you owe each one. Write down pertinent details such as their contact information. This information is important because it helps your attorney decide which bankruptcy chapter you should file under.
3. Research for relief options. Sort through your finances, so you can see where you owe money. You might find that you are better off than you had originally thought. Come up with a game plan for dealing with the debt. You might be able to pick up a second job; therefore, avoiding filing bankruptcy.
4. Sell things you no longer need. Most people who are planning to file for bankruptcy has a tendency to forget that they possess things and assets that they can sell in order to gain money. In determining the items to put up for sale, experts suggest to choose those that do not have a sentimental value but have a cash value. Old clothes, extra gadgets, antiques and even collectibles are some of the items that can be sold through garage sales, consignment shops or even online.
5. Try negotiating. If your account has not been turned over to collections yet, the company you owe payments to might be willing to negotiate. Sometimes companies drop interest rates or lower payments. You might even find that a company is willing to cut off interest on a temporary basis. The companies factor in your past activities when negotiating with you. The better your credit score, the better your chances of negotiation.
6. Consult with a lawyer with the help of technology. Go to a website such as the total bankruptcy site to find a lawyer in your area. These lawyers have information specific to your state, and they can offer answers to your questions regarding statutes of limitations and payment plans.
Taking these steps before filing for bankruptcy might help you avoid filing altogether. If you still can’t make the payments, you at least have already taken some of the necessary steps in the bankruptcy process.